$2 Trillion: The Value Of All the World’s ETFs

By Brendan Conway

When it comes to fund companies trumpeting having reached milestone X of assets under management, I often say, milestones, schmilestones. Except some are worth noting.

Especially when they’re an entire industry. Exchange-traded funds and their close cousins around the world crossed $2 trillion in assets under management about a week ago, according to BlackRock (BLK). (Technically, the number applies to what the industry undescriptively calls “exchange-traded products,” or ETPs — this means ETFs plus a small number of instruments like exchange-traded notes.)

It’s a breakneck pace of growth. This figure is still a fraction of the money held in mutual funds, but the balance is only a few years from getting a lot more even at this pace.

It took nineteen years for ETFs to cross the $1 trillion mark in 2009. The next trillion, a doubling of AUM, came in four years. Such is noted today by BlackRock’s Dodd Kittsley, the firm’s global head of exchange-traded product research, in a press release.

Worldwide ETFs took in $262.7 billion last year, a fresh record. Last year’s money flows just barely edged out the 2008 figure of $259.7 billion.

About Focus on Funds

As exchange-traded funds and other investing vehicles have ballooned in number, the task of figuring out what works well and what doesn’t has only gotten harder. Barrons.com’s Focus on Funds looks under the hood of ETFs, mutual funds and hedge funds for overlooked values, actionable ideas and the latest pitfalls for fund investors.